1 00:00:00,080 --> 00:00:03,600 Speaker 1: Let's go to hospitality. The sectors hit record sales of 2 00:00:03,920 --> 00:00:07,320 Speaker 1: fifteen point nine billion dollars. Restaurant Association and your report 3 00:00:07,320 --> 00:00:09,719 Speaker 1: out takeaways with a big winners up three point two 4 00:00:09,760 --> 00:00:12,959 Speaker 1: percent to four point four billion. Cafes and restaurants barely 5 00:00:13,000 --> 00:00:15,560 Speaker 1: moved up up zero point three percent to seven point 6 00:00:15,600 --> 00:00:19,280 Speaker 1: eight billion. International visitor spending up nine point two percent, 7 00:00:19,320 --> 00:00:21,800 Speaker 1: now sitting at eighty six percent of pre COVID levels. 8 00:00:21,800 --> 00:00:25,400 Speaker 1: But revenue doesn't mean profit. Brad Jacobs is Franchise New 9 00:00:25,480 --> 00:00:28,520 Speaker 1: Zealand chairperson and coffee club co owner with me this morning. Brad, 10 00:00:28,560 --> 00:00:32,199 Speaker 1: Good morning, morning Ryan, so good, thank you, good to 11 00:00:32,240 --> 00:00:33,600 Speaker 1: have you on the show. So revenue is are but 12 00:00:33,680 --> 00:00:34,440 Speaker 1: costs are up too. 13 00:00:36,159 --> 00:00:39,440 Speaker 2: Yeah, yeah, absolutely, I guess. You know, a big headline 14 00:00:39,479 --> 00:00:43,000 Speaker 2: number is nice and it's good to celebrate anywhere, I guess. 15 00:00:43,159 --> 00:00:46,920 Speaker 2: But yeah, when you think about food inflation at nearly 16 00:00:46,960 --> 00:00:51,120 Speaker 2: five percent general and inflation at two point seven percent now, 17 00:00:51,960 --> 00:00:53,559 Speaker 2: and of course you're also got to remember that there 18 00:00:53,600 --> 00:00:56,720 Speaker 2: was about two point three percent more outlets opened across 19 00:00:56,720 --> 00:01:01,280 Speaker 2: the country, So one point four percent todal growth is really, 20 00:01:01,360 --> 00:01:04,479 Speaker 2: unfortunately just not enough to keep people, to keep people 21 00:01:04,480 --> 00:01:05,319 Speaker 2: where they need to be. 22 00:01:05,440 --> 00:01:08,560 Speaker 1: What about wages? Labor costs are forty percent of businesses. 23 00:01:08,600 --> 00:01:11,280 Speaker 1: Now that's the highest diva. Is that, you know, an 24 00:01:11,280 --> 00:01:13,240 Speaker 1: increase in the minimum wage having an effect? Or is 25 00:01:13,240 --> 00:01:15,200 Speaker 1: that a lack of skilled staff and you're having to 26 00:01:15,240 --> 00:01:15,640 Speaker 1: pay more? 27 00:01:15,720 --> 00:01:19,520 Speaker 2: What's the story? Yeah, interesting, not in this report, but 28 00:01:19,600 --> 00:01:22,120 Speaker 2: I did see another report a couple of months ago, 29 00:01:22,520 --> 00:01:24,800 Speaker 2: and it was about the price of coffee versus labor 30 00:01:24,840 --> 00:01:27,800 Speaker 2: over the last ten years, and essentially the price of 31 00:01:28,440 --> 00:01:30,840 Speaker 2: coffee had gone up something like about twenty two percent 32 00:01:30,880 --> 00:01:33,560 Speaker 2: and ten years versus the minimum wage has gone up 33 00:01:33,560 --> 00:01:36,440 Speaker 2: sixty three percent over the last ten years. So you know, 34 00:01:36,440 --> 00:01:38,840 Speaker 2: the reality is I just we can't pass on pricing 35 00:01:38,880 --> 00:01:41,679 Speaker 2: that we need to to customers without running the risk 36 00:01:41,720 --> 00:01:46,200 Speaker 2: of putting ourselves out of market. So unfortunately, yes, minimum 37 00:01:46,200 --> 00:01:48,600 Speaker 2: wages has just grown faster than we can pass on 38 00:01:48,640 --> 00:01:51,280 Speaker 2: a cost, and we've had to absorb a lot. I 39 00:01:51,280 --> 00:01:55,360 Speaker 2: think there is still some shortage of labor. Not as 40 00:01:55,400 --> 00:01:57,920 Speaker 2: bad as it was certainly for us a couple of 41 00:01:57,960 --> 00:02:01,840 Speaker 2: years ago, eighteen months ago, it was a major problem 42 00:02:01,880 --> 00:02:04,600 Speaker 2: for everyone. It has relaxed a little, but I guess 43 00:02:04,640 --> 00:02:08,400 Speaker 2: once those those you know in that type period where 44 00:02:08,400 --> 00:02:11,160 Speaker 2: where labor costs grew quickly, you don't then come back 45 00:02:11,200 --> 00:02:14,079 Speaker 2: down from that. That's the new level then, So. 46 00:02:14,440 --> 00:02:17,760 Speaker 1: How can we still have problems with labor shortages when 47 00:02:17,760 --> 00:02:19,799 Speaker 1: we've got all these people on job seeker you know what, 48 00:02:20,240 --> 00:02:21,320 Speaker 1: what's not computing? 49 00:02:23,480 --> 00:02:26,080 Speaker 2: Yes, maybe some of it is the wrong people in 50 00:02:26,080 --> 00:02:28,880 Speaker 2: the wrong area. Maybe there's a few people that just 51 00:02:28,880 --> 00:02:32,079 Speaker 2: don't actually want to be employed. And of course it 52 00:02:32,200 --> 00:02:35,200 Speaker 2: is you know, I suppose it's it's a term that 53 00:02:35,280 --> 00:02:38,760 Speaker 2: gets thrown around regularly, but perhaps there's jobs out there 54 00:02:38,800 --> 00:02:41,640 Speaker 2: that qws just don't want to do that they see 55 00:02:41,639 --> 00:02:47,280 Speaker 2: that that they're above. So without without people on some 56 00:02:47,360 --> 00:02:50,120 Speaker 2: kind of eVisa, our industry falls apart. That's the reality 57 00:02:50,160 --> 00:02:51,480 Speaker 2: of it. You know, we have a lot of people 58 00:02:51,560 --> 00:02:57,160 Speaker 2: working in hospitality that are either here, studying, traveling new 59 00:02:57,200 --> 00:03:00,600 Speaker 2: to New Zealand and that has been as the same 60 00:03:00,639 --> 00:03:02,600 Speaker 2: for our business as long as I can ever remember. 61 00:03:02,880 --> 00:03:05,560 Speaker 1: Bred Is there still a problem with working from home? 62 00:03:05,720 --> 00:03:08,880 Speaker 1: Is that still affecting business? I saw ACC this week 63 00:03:09,600 --> 00:03:12,919 Speaker 1: went from two days in the office to three. 64 00:03:14,480 --> 00:03:18,799 Speaker 2: Is there? Yeah, it's still a problem. Absolutely. Yeah. If 65 00:03:18,800 --> 00:03:20,320 Speaker 2: you look at the report, you know, if you look 66 00:03:20,320 --> 00:03:23,680 Speaker 2: at Auckland, it performed below below the national average. And 67 00:03:23,720 --> 00:03:25,880 Speaker 2: then when you read further into the report, it says, 68 00:03:25,960 --> 00:03:28,320 Speaker 2: you know, of that one point two percent growth in Auckland, 69 00:03:28,800 --> 00:03:31,400 Speaker 2: most of it came from the suburban areas, not the CBD. 70 00:03:31,919 --> 00:03:34,680 Speaker 2: We still have four outlets in the city we had 71 00:03:34,720 --> 00:03:38,800 Speaker 2: we had six previously, and all four of those outlets 72 00:03:38,800 --> 00:03:40,840 Speaker 2: have never got back to anywhere near close to what 73 00:03:40,880 --> 00:03:44,480 Speaker 2: they used to be pre COVID. Unfortunately, this is Auckland city, 74 00:03:45,360 --> 00:03:48,280 Speaker 2: and yeah, the reality is it's just not as many 75 00:03:48,280 --> 00:03:52,000 Speaker 2: people in offices as there used to be, and that 76 00:03:52,160 --> 00:03:54,000 Speaker 2: part of that, I guess is working from home. I 77 00:03:54,000 --> 00:03:56,160 Speaker 2: think part of it is also, you know, some businesses 78 00:03:56,160 --> 00:03:58,000 Speaker 2: found that they just didn't need to be in the 79 00:03:58,040 --> 00:04:02,720 Speaker 2: city and so you see little subtle areas growing in Auckland, 80 00:04:02,960 --> 00:04:05,360 Speaker 2: people that are not needing to be right in the 81 00:04:05,360 --> 00:04:08,200 Speaker 2: city center anymore. The prestige of being in the city 82 00:04:08,240 --> 00:04:09,240 Speaker 2: center just isn't there. 83 00:04:09,640 --> 00:04:12,080 Speaker 1: Bread appreciate your time this morning. Thank you. Brad Jacob's 84 00:04:12,120 --> 00:04:15,560 Speaker 1: franchise and he'szell On chairperson and. 85 00:04:14,600 --> 00:04:16,839 Speaker 2: For more from early edition with Ryan Bridge. 86 00:04:16,920 --> 00:04:20,360 Speaker 1: Listen live to news Talks it'd be from five am weekdays, 87 00:04:20,640 --> 00:04:22,680 Speaker 1: or follow the podcast on iHeartRadio.